Small but mighty: Priming biotech first-time launchers to compete with established players

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In recent years, the pharmaceutical industry has been bringing much-needed innovation to market, and first-time launchers have been leading the charge. A growing share of new molecular entities submitted for FDA approval over the past decade have come from first-time launchers.1 Between 2018 and 2023, roughly 40 percent of new assets were launched by companies with little to no commercialization experience, almost double their contribution from the previous five years. The presence of these early-stage companies has grown since the early 2000s—a trend that has continued unabated despite the recent biotech downturn (Exhibit 1).

1
First-time and recent launchers account for a growing share of new product launches across the pharmaceutical industry.

An analysis of the current clinical pipeline suggests that these companies may play an even bigger role in the coming years; about 80 percent of the projected “blockbusters”—assets that achieve over $1 billion in peak-year sales—for the next five years are currently in the portfolios of first-time and recent launchers.2

Within the pharmaceutical industry, first-time launchers play a critical role as innovators. They are developing breakthroughs in new modalities that may revolutionize care for patients with limited treatment options. For example, cell and gene therapies make up 22 percent of first-time launchers’ portfolios, compared with just 12 percent for established launchers. These companies also offer promising solutions for rare-disease patients who previously had no or very limited treatment options in areas ranging from Duchenne muscular dystrophy to amyloidosis.

Despite such innovations, first-time launchers face unique hurdles when bringing their products to market. The high cost of launching and building a commercial engine while maintaining R&D commitments can strain resources. Further, the recent biotech downturn has led to increased competition for the funding needed to power commercial launches.

Consequently, these companies experience lower success rates than their established peers. In the past five years, only 20 to 30 percent of first-time launchers exceeded launch expectations, compared with 40 to 50 percent for established companies. Similarly, 10 to 20 percent of these companies outperform the S&P Biotech Index, and 10 to 20 percent are acquired (Exhibit 2). This underperformance is a missed opportunity given first-time launchers’ potential to improve patient outcomes and create shareholder value.

2
First-time launchers have seen lower rates of success than established players, limiting their potential to benefit patient demand and shareholder value.

In today’s market, rapid brand acceleration postapproval is crucial for long-term success. Swift and decisive action is required to address a recent compression of asset life cycles, driven by increased competition, biosimilar adoption, and recent policy shifts. Considering the high stakes of commercialization, leaders of early-stage biotech companies should approach their initial product launch with open eyes to learn from the triumphs and pitfalls of their predecessors as they address these critical questions:

  • Is our portfolio innovative, diverse, and focused on indications with high potential for success?
  • How can we ensure that our launch is sufficiently powered (for example, has adequate resources) to support a commercial engine over multiple years?
  • Can our data, analytics, and digital capabilities enable us to define a highly precise launch strategy?

A distinctive and robust portfolio

At the core of any biotech company is its portfolio. Assets that target rare-disease or white space indications have greater odds of launch and financial success. Across indications, companies can also find increased financial success rates by developing multiple assets.

Finding success in rare-disease or white space indications

First-time launchers with assets in white space indications (that is, indications with no competitors) are 1.7 times more likely to exceed expectations than in indications with three or more competitors.4 These companies have thrived in rare diseases, which have historically lower rates of competition, exceeding launch expectations roughly 40 percent of the time.5 Thanks in part to their strong commercial performance, about half of rare-disease first-time launchers also outperformed the S&P Biotech Index in total shareholder returns (Exhibit 3).

3
First-time rare-disease launchers often exceed commercial expectations and, like multiasset launchers, generate strong shareholder value.

Finding success through innovation

As might be expected, innovative assets can pave a surer path to launch success, but they do not guarantee a company’s financial success. Across first-time launchers, there is a wide array of innovative assets, from “first in class” assets to modalities that represent an improvement on the current standard of care. Over 30 percent of innovative assets from first-time launchers outperform expectations, compared with 20 percent of less innovative products.6 For example, cell and gene therapies and antibody drug conjugates have created significant commercial value and patient impact. However, first-time launchers with innovative assets are no more likely to outperform the S&P Biotech Index than those with less disruptive products.7 While innovative assets certainly have an impact on the market, driving holistic financial value depends on broader considerations, such as a company’s pipeline.

Finding success with a multiasset portfolio

A company’s pipeline plays a critical role in its financial success and assessments of future growth potential. First-time launchers with multiple assets have higher rates of financial success, with about half outperforming the S&P 500 Biotech Index over a five-year period, compared with roughly 30 percent of their single-product peers (Exhibit 3). Some of these multiasset companies have diversified their portfolios through platform technologies, with the initial launch serving as “proof of concept” for follow-on assets. This trend should encourage companies that are assessing the potential of their portfolios or platform technologies.

Essential fuel for a commercial launch

Any commercial launch demands considerable SG&A investment—in addition to the funding needed to sustain preexisting R&D commitments. A first-time launcher’s ability to support investment throughout the launch period is a critical driver of success.

Investing in a robust commercial engine

On average, first-time launchers invest $80 million to $100 million annually in SG&A beginning at launch year and continuing over subsequent years.8 Those that set out to beat prelaunch forecasts or compete with an established launcher typically spend much more. On average, companies outperforming commercial expectations invest 1.5 times as much on launch activities as their peers that don’t (Exhibit 4)—from access strategy to educational activities by medical-affairs teams to promotional efforts by a new sales force.

4
First-time launchers that exceed commercial expectations tend to spend more on SG&A at launch.

Because of cash constraints, first-time launchers have historically struggled in larger indications (such as primary care), where considerable investments are critical for success. However, some have thrived in highly competitive and expansive treatment areas dominated by established “powerhouse” players. For example, some first-time launchers in neuroscience and primary care indications have leveraged a robust commercial engine and large sales force to successfully compete with established players, even with limited clinical differentiation of their products.

The importance of early—and timely— fundraising

The ability to finance a large-scale launch while maintaining a focus on R&D can make or break many first-time launchers. To secure the necessary funds, most first-time launchers go public about six years before launch.9 These companies also seek follow-on fundraising, with over 70 percent of post-IPO capital coming from such efforts.10 Successful first-time launchers raise significantly more funds—on average two to three times the amounts raised by their less successful peers. These companies typically raise funds earlier and more aggressively in the years leading up to launch (Exhibit 5), enabling them to build up substantial cash reserves in advance of their commercial debut.

5
First-time launchers that outperform commercial expectations or the S&P Biotech Index tend to be more successful in post-IPO fundraising.

To maximize fundraising potential, first-time launchers can time their efforts to coincide with inflection points that signal commercial success. For most first-time launchers, company value peaks before launch and then declines (Exhibit 6). Timing fundraising to critical moments in asset development, such as initial pivotal trial results (typically one to two years prelaunch) and regulatory approval, can lead to greater success, especially in today’s competitive biotech fundraising environment.

6
First-time launchers can time fundraising to valuation peaks at key moments such as pivotal trial results and regulatory approval.

Alternative paths to market

First-time launchers that lack funding or asset mix can consider alternative approaches, including partnering with an established launcher or developing next-generation commercial capabilities. Partnerships may reduce a company’s revenues in the near term, but the organization benefits in the long term by tapping into the established partner’s expertise, which can help the company lay the groundwork for future launches. Companies can also invest in next-generation capabilities to become more precise at initial launch and across future commercialization efforts.

Next-generation commercial capabilities

Commercialization needs have shifted recently across go-to-market capabilities, with meaningful implications for first-time launchers as they set strategy for functions that interface with healthcare professionals, patients, and payers.

Enabling a ‘surgical’ go-to-market strategy

Go-to-market strategy has shifted across the biopharma industry, with a move away from the one-size-fits-all rep-driven model. To meet the evolving needs of patients and healthcare providers (HCPs), pharmaceutical companies have looked to a broader variety of channels, such as social media and connected TV. Each incremental channel has contributed to further proliferation of marketing roles and increased complexity at launch.

First-time launchers may be uniquely equipped to meet these challenges. Unencumbered by legacy systems and processes and with a blank slate across key enablers—from organization design to tech stack—earlier-stage companies have already delivered significant go-to-market innovation. Leveraging lessons learned from industry leaders, more and more first-time launchers can join the ranks of those reshaping commercial launches to be more precise and digitally focused.

Data-driven, precise marketing techniques are crucial for first-time launchers with limited resources. For example, AI tools such as “next-best action” models prioritize HCPs based on factors such as historical behavior and patient demographics. Similarly, first-time launchers considering broad direct-to-consumer (DTC) engagement can maximize impact with content tailored to microsegments defined by patient needs and behaviors. Continual experimentation through approaches like matched-market testing can further refine messaging and optimize channel selection. For rare-disease companies or others unlikely to employ large-scale DTC techniques, analytical patient-finding methods also enable hyperspecific HCP and patient engagement. These precision-based methods, adopted from cross-industry marketing leaders, enable efficient resource allocation and maximize the impact of sales and marketing spend.

Further, new channels—such as social media, connected TV, and revamped websites—offer cost-effective, high-impact reach for budget-conscious first-time launchers. Recruiting marketing roles early can ensure that digital capabilities and strategies are ready for launch. With a digital, data-driven go-to-market strategy, first-time launchers can set the stage for next-generation commercial engagement from day one.

Establishing a successful access and distribution strategy

Pharmaceutical companies also encounter significant complexity in navigating market access. Given a high degree of concentration in the payer landscape, balancing high and rapid coverage with responsible and sustainable rebates can create significant challenges. Biopharma companies should develop sophisticated approaches and actively engage with payers.

Historically, first-time launchers have faced challenges in access positioning due to their limited portfolio breadth and scale of payer relationships. They also tend to delay onboarding their market access function, which leads to “late in the game” access strategy setting. A survey of first-time launch leaders revealed that more successful companies onboarded their access team four to six months earlier than their less successful peers. Among the less successful cohort, about 75 percent acknowledged that market access engagement was initiated too late.11

First-time launchers can belie these challenges by prioritizing access earlier in their launch planning. That includes building in-house capabilities for an access strategy earlier and contracting with external vendors when necessary. They can also take advantage of their single-asset focus without juggling competing priorities across a broader portfolio to set a sustainable access strategy.

A clear demonstration of high patient need with rapid volume growth—generated through concerted sales and marketing strategies—can enable earlier expansion of coverage. Companies can also accelerate coverage with a clear demonstration of clinical innovation by considering access in pivotal study design. Generating early superiority data and engaging key opinion leaders (KOLs) or institutions that establish guidelines can demonstrate the therapy’s value to payers. Regardless of coverage speed, first-time launchers should prepare to support HCP offices with education on key processes like prior authorization and appeals. Early engagement on access, rapid volume build, and an impactful evidence strategy can position a therapy for earlier coverage expansion.

As first-time launchers address access challenges, they should also consider the complexities in distribution strategies with highly varied options, from open or closed specialty pharmacy networks to direct-to-patient distribution. A fit-for-purpose strategy is particularly important for complex products and unique modalities like cell and gene therapies. Similarly, select first-time launchers in broader indications have doubled down on digital engagement with direct-to-patient distribution by partnering with existing pharmacies or telehealth providers to offer a fully integrated care experience. Regardless of the context, first-time launchers that determine their distribution strategy early can establish a clear pathway for patient access upon approval, setting the foundation for long-term success.


First-time launchers represent a growing and vital portion of the pharmaceutical industry, but they historically experience low success rates at launch. By drawing insights from their predecessors—assessing the full potential of their assets, adequately powering their commercial launch, and crafting a tailored and precise go-to-market strategy—these small but potentially mighty innovators can achieve their growth and performance aspirations while maximizing shareholder value and patient impact.

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